House of Reps suspends deliberation on Buhari’s $22.8bn loan request indefinitely

The House of Representatives has put on hold the deliberations on the $22.79 billion credit line request by President Muhammadu Buhari.

At the Wednesday sitting, the lower arm of the parliament scheduled the report by its Committee on Aids, Loans and Debt Management on the 2016–2018 Federal Government External Borrowing (Rolling) Plan as the last item for consideration on the day’s order paper.

Femi Gbajabiamila, the Speaker, demanded the consideration be stood down by asking Abubakar Fulata, Chairman Rules and Business, to move for the standing down without mentioning when talks would resume.

Gbajabiamila had on Tuesday said the loan request would be discussed on Wednesday.

His assurance came in the wake of a petition spearheaded by Henry Nwawuba representing a posse of South East elite against the consideration and endorsement of the loan.

The highly controversial loan request had scaled the Senate approval hurdle last week amidst a fierce resistance from senators led Enyinnaya Abaribe, the Senate Minority Leader.

Read also: I took part in search of Dasuki’s house – Witness

The borrowing aims to bankroll a number of projects among which are he Nigeria Electricity Transmission and Access Project ($364,000,000); Social Inclusion and Welfare Advancement project also known as National Social Safety Net Project, ($500,000) and the Economic Reforms and Governance Project known also as the Fiscal Governance Project ($200,000,000).

Nigeria’s debt service to revenue ratio has become worrisomely huge with recent figure standing at 60 per cent.

This implies that Nigeria spends at least 60 per cent of all the revenue it makes to repay debt, leaving the remaining 40 per cent for capital projects and recurrent expenditure.

Interestingly, the World Bank recommends that a country’s debt service to revenue ratio should not exceed 22.5%.

The Office of the Accountant General of the Federation (OAGF) confirmed recently that Nigeria spent a humongous sum of N2.11 trillion on debt service in 2019 alone.

In 2018, government spending on debt servicing was N2.2 trillion, well above the N1.68 trillion it spent on infrastructure.

According to the Debt Management Office, Nigeria’s latest  debt stock figure is N26.2 trillion and government is determined to borrow more despite the Central Bank of Nigeria’s (CBN) warning.

Join the conversation

Opinions

Support Ripples Nigeria, hold up solutions journalism

Balanced, fearless journalism driven by data comes at huge financial costs.

As a media platform, we hold leadership accountable and will not trade the right to press freedom and free speech for a piece of cake.

If you like what we do, and are ready to uphold solutions journalism, kindly donate to the Ripples Nigeria cause.

Your support would help to ensure that citizens and institutions continue to have free access to credible and reliable information for societal development.

Donate Now